XL CAPITAL LTD
FORM OF
, dated as of [_________ __], 2007 (the
"Agreement") by and between XL Capital Ltd, a Cayman Islands exempted limited
company (the "Company"), and [________] (the "Remarketing Agent"), and confirmed
and accepted by U.S. Bank National Association, not individually but solely as
Purchase Contract Agent (the "Purchase Contract Agent") and as attorney-in-fact
of the Holders of Purchase Contracts (as defined in the Purchase Contract
Agreement (as defined herein)).
WHEREAS, the Company issued $825,000,000 aggregate stated amount of its
Normal Units (the "Normal Units") under the Purchase Contract Agreement, dated
as of March 23, 2004, by and between the Purchase Contract Agent and the Company
(the "Purchase Contract Agreement"); and
WHEREAS, the 2.53% Senior Notes due 2009 forming a part of the Normal
Units (the "Notes") have been pledged pursuant to the Pledge Agreement (the
"Pledge Agreement"), dated as of March 23, 2004, by and among the Company, U.S.
Bank Trust National Association, as collateral agent (the "Collateral Agent"),
custodial agent and securities intermediary and U.S. Bank National Association,
as Purchase Contract Agent, to secure the obligations of Holders of Normal Units
under the related Purchase Contracts on the Stock Purchase Date; and
WHEREAS, the Remarketing Agent will attempt on May 2, 2007 (the
"Remarketing Date") to remarket all of (i) the Notes of Holders of Normal Units
and (ii) the Separate Notes of Holders who elect to participate in the
remarketing, pursuant respectively to the procedures set forth in Section 5.4(b)
of the Purchase Contract Agreement, Section 4.5(d) of the Pledge Agreement and
Sections 2.19 and 2.20 of the First Supplemental Indenture, dated as of March
23, 2004, between the Company and U.S. Bank National Association, as trustee
(the "Supplemental Indenture"), to the Indenture, dated as of January 23, 2003
(the "Base Indenture"), between the Company and U.S. Bank National Association,
as trustee (each of which Sections is incorporated herein by reference); and
WHEREAS, in the event the remarketing on the Remarketing Date is
unsuccessful, the Remarketing Agent will remarket the Notes to be included in
the remarketing on May 3, 2007, and, if necessary, will attempt to remarket such
Notes on May 4, 2007 and, if necessary, will attempt to remarket such Notes on
May 7, 2007 and, if necessary, will attempt to remarket such Notes on May 8,
2007 and, if necessary, will attempt to remarket such Notes on May 9, 2007 and,
if necessary, will attempt to remarket such Notes on May 10, 2007 (any such date
after the Remarketing Date on which a subsequent remarketing is attempted, a
"Subsequent Remarketing Date"); and
WHEREAS, in the event of a successful remarketing on the Remarketing
Date or any Subsequent Remarketing Date, as the case may be, the applicable
interest rate on the Remarketed Notes (as defined below) included in such
successful remarketing will be reset on the settlement date of such Remarketing
Date or Subsequent Remarketing Date to the rate determined by the Remarketing
Agent in good faith that will result in the aggregate market value of the
Remarketed Notes to equal 100.25% of the aggregate principal amount of such
Remarketed Notes, as of such Remarketing Date or Subsequent Remarketing Date
(the "Reset Rate"), provided that the Reset Rate shall be limited to the maximum
rate permitted by applicable law; and
WHEREAS, the Company has requested [________] to act as the Remarketing
Agent, and as such to perform the services described herein; and
WHEREAS, [________] is willing to act as the Remarketing Agent and as
such to perform such duties on the terms and conditions expressly set forth
herein;
NOW, THEREFORE, for and in consideration of the covenants herein made,
and subject to the conditions herein set forth, the parties hereto agree as
follows:
Section 1. DEFINITIONS.
(a) Capitalized terms used and not defined in this Agreement, in the
recitals hereto or in the paragraph preceding such recitals shall have the
meanings assigned to them in the Purchase Contract Agreement or, if not therein
defined, the Pledge Agreement.
(b) As used in this Agreement, the following terms have the following
meanings:
"Preliminary Prospectus" means any preliminary prospectus
relating to the Remarketed Notes included in the Registration Statement
(including any preliminary prospectus supplement), including the
documents incorporated by reference therein as of the date of such
Preliminary Prospectus; and any reference to any amendment or
supplement to such Preliminary Prospectus shall be deemed to refer to
and include any documents filed after the date of such Preliminary
Prospectus, under the Exchange Act, and incorporated by reference in
such Preliminary Prospectus.
"Prospectus" means the prospectus relating to the Remarketed
Notes (including any prospectus supplement), in the form in which first
filed, or transmitted for filing, with the Commission after the
effective date of the Registration Statement pursuant to Rule 424(b),
including the documents incorporated by reference therein as of the
date of such Prospectus; and any reference to any amendment or
supplement to such Prospectus shall be deemed to refer to and include
any documents filed after the date of such Prospectus, under the
Exchange Act, and incorporated by reference in such Prospectus.
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"Registration Statement" means a registration statement under
the Securities Act of 1933, as amended (the "Securities Act") filed and
prepared by the Company covering, inter alia, the Remarketing of the
Remarketed Notes pursuant to Section 5(a) hereunder, including all
exhibits thereto and the documents incorporated by reference in the
prospectus contained in such registration statement, and any
post-effective amendments thereto.
"Remarketed Notes" means the Pledged Notes and the Separate
Notes, if any, subject to Remarketing as identified to the Remarketing
Agent by the Purchase Contract Agent and the Custodial Agent,
respectively, prior to 10:00 a.m., New York City time, on the Business
Day immediately preceding the Remarketing Date, and shall include: (a)
the Notes of the Holders of Normal Units who have not notified the
Purchase Contract Agent prior to 5:00 p.m. on the thirteenth Business
Day prior to the Stock Purchase Date of their intention to effect a
Cash Settlement of the related Purchase Contracts pursuant to the terms
of the Purchase Contract Agreement or who have so notified the Purchase
Contract Agent but failed to make the required cash payment on the
thirteenth Business Day prior to the Stock Purchase Date pursuant to
the terms of the Purchase Contract Agreement, and (b) the Separate
Notes of the holders of Separate Notes, if any, who have elected to
have their Separate Notes be remarketed in such Remarketing pursuant to
the terms of the Purchase Contract Agreement and the Supplemental
Indenture.
"Remarketing" means the remarketing of the Remarketed Notes
pursuant to this
"Remarketing Agent" means [________] appointed as the
Remarketing Agent by the Company pursuant to Section 2(a) hereof.
"Remarketing Materials" means the Preliminary Prospectus and
the Prospectus furnished by the Company to the Remarketing Agent for
distribution to investors in connection with the Remarketing.
"Transaction Documents" means this Agreement, the Purchase
Contract Agreement, the Pledge Agreement, the Indenture and the
Supplemental Indenture, in each case as amended or supplemented from
time to time.
Section 2. APPOINTMENT AND OBLIGATIONS OF REMARKETING AGENT.
(a) The Company hereby appoints [________] and [________] hereby
accepts such appointment, (i) as the Remarketing Agent to determine, in
consultation with the Company, in the manner provided for herein, in the
Purchase Contract Agreement and in the Notes, the Reset Rate that, in the
opinion of the Remarketing Agent, will, when applied to the Remarketed
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Notes, enable the aggregate market value of the Remarketed Notes equal 100.25%
of the aggregate principal amount of such Remarketed Notes as of the Remarketing
Date or as of any Subsequent Remarketing Date, as the case may be, and (ii) as
the exclusive Remarketing Agent (subject to the right of such Remarketing Agent
to appoint additional remarketing agents hereunder as described below) to
remarket the Remarketed Notes to be included in the remarketing on the
Remarketing Date, and, if necessary, on May 3, 2007, and, if necessary, on May
4, 2007 and, if necessary, on May 7, 2007 and, if necessary, on May 8, 2007 and,
if necessary, on May 9, 2007 and, if necessary, on May 10, 2007, as the case may
be. The Remarketing Agent shall have the right, on 15 Business Days' notice to
the Company, to appoint one or more additional remarketing agents so long as any
such additional remarketing agents shall be reasonably acceptable to the
Company; provided that any such appointment shall not increase the Remarketing
Fee (as defined in Section 4 hereof). Upon any such appointment, the parties
shall enter into an appropriate amendment to this Agreement to reflect the
addition of any such additional remarketing agent.
(b) Subject to the terms and conditions set forth herein and in the
Purchase Contract Agreement, the Remarketing Agent shall use its reasonable best
efforts to (i) remarket on the Remarketing Date the Remarketed Notes at the
Reset Rate, (ii) in the event the Remarketing Agent cannot establish such a
Reset Rate on the Remarketing Date, attempt to remarket such Notes on May 3,
2007, and, if necessary, on May 4, 2007 and, if necessary, on May 7, 2007 and,
if necessary, on May 8, 2007 and, if necessary, on May 9, 2007 and, if
necessary, on May 10, 2007, in each case at the Reset Rate and (iii) in the
event of a Last Failed Remarketing, promptly return the Pledged Notes, if any,
included in such Last Failed Remarketing to the Collateral Agent to be held by
the Collateral Agent in accordance with Section 4.5(b) of the Pledge Agreement
(which Section is incorporated herein by reference) and return any Separate
Notes included in the remarketing to the Custodial Agent in accordance with
Section 4.5(d) of the Pledge Agreement, Section 5.4(b)(ii) of the Purchase
Contract Agreement and Section 2.19 of the Supplemental Indenture (which
Sections are incorporated herein by reference). After deducting the fee
specified in Section 4 below, the proceeds of any such successful remarketing
shall be delivered to the Purchase Contract Agent or the Custodial Agent, as
applicable, in accordance with Sections 4.5(a) and 4.5(d) of the Pledge
Agreement (which Section is incorporated herein by reference) and Section 5.4(b)
of the Purchase Contract Agreement (which Section is incorporated herein by
reference). The right of each Holder of Normal Units or Separate Notes to have
Notes included in any remarketing shall be subject to the conditions that (i)
the Remarketing Agent conducts a remarketing on such date pursuant to the terms
of this Agreement, (ii) the Notes included in a remarketing have not been called
for redemption upon the occurrence of a Special Event, (iii) the Remarketing
Agent is able to find a purchaser or purchasers for the Remarketed Notes at the
Reset Rate and (iv) such purchaser or purchasers deliver the purchase price
therefor to the Remarketing Agent as and when required.
(c) It is understood and agreed that the Remarketing Agent shall not
have any obligation whatsoever to purchase any Notes, whether in a remarketing
held on the Remarketing Date or on any Subsequent Remarketing Date or otherwise,
and shall in no
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way be obligated to provide funds to make payment upon tender of Notes for
remarketing or to otherwise expend or risk its own funds or incur or be exposed
to financial liability in the performance of its duties under this Agreement,
and, without limitation of the foregoing, the Remarketing Agent shall not be
deemed an underwriter of the Remarketed Notes. The Company shall not be
obligated in any case to provide funds to make payment upon delivery of Notes
for remarketing.
(d) The Remarketing Agent shall also, if required by the Securities Act
or the rules and regulations promulgated thereunder, deliver to each purchaser a
Prospectus in connection with the Remarketing.
(e) If, by 4:30 p.m., New York City time, on the Remarketing Date, the
Remarketing Agent is unable to remarket all Remarketed Notes included in the
Remarketing, a failed Remarketing (the "Failed Remarketing") shall be deemed to
have occurred, and the Remarketing Agent shall so advise by telephone the
Depositary and the Company.
(f) The Remarketing Agent shall advise, by telephone, the Company of
the Reset Rate determined in a Successful Remarketing (as defined in Section 4
hereof) as soon as practicable after such determination.
(g) By approximately 4:30 p.m., New York City time, on the Trading Day
following the Remarketing Date, PROVIDED that there has not been a Failed
Remarketing, the Remarketing Agent shall advise, by telephone, (i) the
Depositary of the Reset Rate determined in the Remarketing and the number of
Remarketed Notes sold in the Remarketing, (ii) each purchaser (or the Depositary
Participant thereof) of the Reset Rate and the number of Remarketed Notes such
purchaser is to purchase and (iii) each purchaser to give instructions to its
Depositary Participant to pay the purchase price on the Settlement Date in same
day funds against delivery of the Remarketed Notes purchased through the
facilities of the Depositary.
Section 3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company represents and warrants to the Remarketing Agent (i) on and
as of the date any Remarketing Materials are first distributed in connection
with the Remarketing (the "Commencement Date"), (ii) on and as of the
Remarketing Date or any Subsequent Remarketing Date and (iii) on and as of the
settlement date relating to such Remarketing Date or Subsequent Remarketing Date
(the "Settlement Date"), that:
(a) Each of the representations and warranties of the Company as set
forth in Sections 2(a) through 2(aa) of the Underwriting Agreement dated March
17, 2004 (the "Underwriting Agreement") among the Company and the Underwriters
identified in Schedule II thereto, was true and correct when made on March 17,
2004; [Note: representations and warranties similar to those contained in the
Underwriting Agreement to be included and agreed upon; provided that for
purposes of such representations and warranties, any reference in such sections
of the Underwriting Agreement to (i) the "Registration Statement", the
"Prospectus" or the "Preliminary Prospectus" shall be deemed to refer to such
terms as defined herein and (ii) the "Closing Date" shall be
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deemed to refer to the applicable Remarketing Date or Subsequent Remarketing
Date.]
(b) The Registration Statement, if any, in the form heretofore
delivered or to be delivered to the Remarketing Agent, has been declared
effective by the Commission in such form; and no stop order suspending the
effectiveness of the Registration Statement has been issued and no proceeding
for that purpose has been initiated or threatened by the Commission.
(c) The documents incorporated by reference in the Prospectus, when
they were filed with the Commission, conformed in all material respects to the
requirements of the Exchange Act and the rules and regulations of the Commission
thereunder, and none of such documents contained an untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading; and any further documents so filed and
incorporated by reference in the Prospectus or any further amendment or
supplement thereto, when such documents are filed with the Commission, will
conform in all material respects to the requirements of the Exchange Act and the
rules and regulations of the Commission thereunder, and will not contain an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
(d) The Registration Statement, if any, conforms (and the Prospectus,
if any, and any further amendments or supplements to the Registration Statement
or the Prospectus, when they become effective or are filed with the Commission,
as the case may be, will conform) in all material respects to the requirements
of the Securities Act, the Trust Indenture Act of 1939, as amended, and the
rules and regulations promulgated thereunder, and the Registration Statement and
the Remarketing Materials (and any amendment or supplement thereto) as of their
respective effective or filing dates and as of the Commencement Date, applicable
Remarketing Date or Subsequent Remarketing Date and Settlement Date do not and
will not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading; provided that no representation and warranty is made as
to any statement of eligibility on Form T-1 filed or incorporated by reference
as part of the Registration Statement or the Remarketing Materials, or as to
information relating to the Remarketing Agent or the Holders of the Remarketed
Notes contained in or omitted from the Registration Statement or the Remarketing
Materials in reliance upon and in conformity with written information furnished
to the Company by the Remarketing Agent expressly for use therein.
(e) This Agreement has been duly authorized, executed and delivered by
the Company.
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(f) The Remarketed Notes will conform to the descriptions thereof
contained in the Prospectus and in any other Remarketing Materials.
(g) No Event of Default (as defined in the Indenture, as supplemented
by the Supplemental Indenture) has occurred and is continuing.
Section 4. FEES.
In the event of a successful remarketing in which the Remarketed Notes
are sold for an aggregate amount that is equal to 100.25% of the aggregate
principal amount of the Remarketed Notes (a "Successful Remarketing"), the
Remarketing Agent shall retain as a remarketing fee (the "Remarketing Fee") an
amount not exceeding 25 basis points (0.25%) of the Remarketing Value of the
Remarketed Notes in accordance with Section 5.4(b) of the Purchase Contract
Agreement and Section 2.19 of the Supplemental Indenture.
Section 5. COVENANTS OF THE COMPANY.
(a) The Company covenants and agrees as follows:
1. If and to the extent the Remarketed Notes are required (in
the view of counsel, which need not be in the form of a
written opinion, for either the Remarketing Agent or the
Company) to be registered under the Securities Act as in
effect at the time of the Remarketing,
i. to prepare the Registration Statement and the
Prospectus to file any such Prospectus pursuant to
the Securities Act within the period required by the
Securities Act and the rules and regulations
thereunder and to use commercially reasonable
efforts to cause the Registration Statement to be
declared effective by the Commission prior to the
second Business Day immediately preceding the
Remarketing Date;
ii. to file promptly with the Commission any amendment
to the Registration Statement or the Prospectus or
any supplement to the Prospectus that may, in the
reasonable judgment of the Company, be required by
the Securities Act or requested by the Commission;
iii. to advise the Remarketing Agent, promptly after it
receives notice thereof, of the time when any
amendment to the Registration Statement has been
filed or becomes effective or any supplement to the
Prospectus or any amended Prospectus has been filed
and to furnish the Remarketing Agent with copies
thereof;
iv. to advise the Remarketing Agent, promptly after it
receives notice thereof, of the issuance by the
Commission of any stop order or of any order
preventing or suspending the use of the Prospectus,
of
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the suspension of the qualification of any of the
Remarketed Notes for offering or sale in any
jurisdiction, of the initiation or threatening of
any proceeding for any such purpose, or of any
request by the Commission for the amending or
supplementing of the Registration Statement or the
Prospectus or for additional information, and, in
the event of the issuance of any stop order or of
any order preventing or suspending the use of any
Prospectus or suspending any such qualification, to
use promptly its best efforts to obtain its
withdrawal;
v. to furnish promptly to the Remarketing Agent such
copies of the following documents as the Remarketing
Agent shall reasonably request: (A) conformed copies
of the Registration Statement as originally filed
with the Commission and each amendment thereto (in
each case excluding exhibits); (B) the Preliminary
Prospectus and any amended or supplemented
Preliminary Prospectus, (C) the Prospectus and any
amended or supplemented Prospectus; and (D) any
document incorporated by reference in the Prospectus
(excluding exhibits thereto); and, if at any time
when delivery of a Prospectus is required in
connection with the Remarketing, any event shall
have occurred as a result of which the Prospectus as
then amended or supplemented would include any
untrue statement of a material fact or omit to state
any material fact necessary in order to make the
statements therein, in the light of the
circumstances under which they were made when such
Prospectus is delivered, not misleading, or if for
any other reason it shall be necessary during such
same period to amend or supplement the Prospectus or
to file under the Exchange Act any document
incorporated by reference in the Prospectus in order
to comply with the Securities Act or the Exchange
Act, to notify the Remarketing Agent and, upon its
request, to file such document and to prepare and
furnish without charge to the Remarketing Agent and
to any dealer in securities as many copies as the
Remarketing Agent may from time to time reasonably
request of an amended or supplemented Prospectus
that will correct such statement or omission or
effect such compliance;
vi. prior to filing with the Commission (A) any
amendment to the Registration Statement or
supplement to the Prospectus or (B) any Prospectus
pursuant to Rule 424 under the Securities Act, to
furnish a copy thereof to the Remarketing Agent and
counsel to the Remarketing Agent;
vii. as soon as practicable, but in any event not later
than eighteen months, after the effective date of
the Registration Statement, to make "generally
available to its security holders" an "earnings
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statement" of the Company and its subsidiaries
complying with (which need not be audited) Section
11(a) of the Securities Act and the rules and
regulations thereunder (including, at the option of
the Company, Rule 158 under the Securities Act). The
terms "Generally Available to its Security Holders"
and "Earnings Statement" shall have the meanings set
forth in Rule 158 under the Securities Act; and
viii. to take such action as the Remarketing Agent may
reasonably request in order to qualify the
Remarketed Notes for offer and sale under the
securities or "blue sky" laws of such jurisdictions
as the Remarketing Agent may reasonably request;
provided that in no event shall the Company be
required to qualify as a foreign corporation or to
file a general consent to service of process in any
jurisdiction.
2. To pay: (1) the costs incident to the preparation and
printing of the Registration Statement, if any, any Prospectus
and any other Remarketing Materials and any amendments or
supplements thereto; (2) the costs of distributing the
Registration Statement, if any, any Prospectus and any other
Remarketing Materials and any amendments or supplements
thereto; (3) any fees and expenses of qualifying the
Remarketed Notes under the securities laws of the several
jurisdictions as provided in Section 5(a)(9) and of preparing,
printing and distributing a Blue Sky Memorandum, if any
(including any related fees and expenses of counsel to the
Remarketing Agent); (4) all other costs and expenses incident
to the performance of the obligations of the Company hereunder
and the Remarketing Agent hereunder; and (5) the reasonable
fees and expenses of one counsel to the Remarketing Agent in
connection with their duties hereunder.
3. To furnish the Remarketing Agent with such information and
documents as the Remarketing Agent may reasonably request in
connection with the transactions contemplated hereby, and to
make reasonably available to the Remarketing Agent and any
accountant, attorney or other advisor retained by the
Remarketing Agent such information that parties would
customarily require in connection with a due diligence
investigation conducted in accordance with applicable
securities laws.
(b) The Remarketing Agent covenants and agrees as follows:
1. that it will not disseminate any written material for or in
connection with the Remarketing other than the Remarketing
Materials and agrees that it will not make any written
statements in connection with the
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Remarketing, other than statements that are set forth in the
Remarketing Materials unless authorized in advance by the
Company;
2. that it will not distribute the Remarketing Materials if it
has been notified by the Company in writing of (i) the
occurrence of any event, or the discovery of any fact, that
could reasonably be expected to cause any representation or
warranty contained in this Agreement to be untrue or
inaccurate in any material respect, (ii) the issuance of any
comment or stop order or the taking of any other action by the
Commission or any other governmental or regulatory agency with
respect to the Remarketing Materials, (iii) the occurrence of
any event, or the discovery of any fact, that could reasonably
be expected to cause the Company to amend or supplement the
Remarketing Materials and (iv) the occurrence of any event, or
the discovery of any fact, that would cause the Remarketing
Materials to contain any untrue statement of a material fact
or omit to state therein a material fact necessary to make the
statements therein, in light of the circumstances under which
they were made, not misleading;
3. that if, and for so long as the Notes are in the possession
of the Remarketing Agent prior to the settlement of the
Purchase Contracts, (i) the Remarketing Agent will hold such
Notes for the sole benefit of the Company, (ii) such Notes
will continue to constitute Collateral (as defined in the
Pledge Agreement and (iii) the Company will retain all of the
rights, privileges and benefits with respect thereto as
described in the Pledge Agreement.
Section 6. REPLACEMENT AND RESIGNATION OF REMARKETING AGENT.
(a) The Company may replace [_______] as the Remarketing Agent by
giving notice prior to 3:00 p.m., New York City time on the [eleventh] Business
Day immediately prior to the Remarketing Date. Upon providing such notice, the
Company shall use all reasonable best efforts to appoint such a successor and to
enter into a with such successor as soon as reasonably
practicable.
(b) [________] may resign at any time and be discharged from its duties
and obligations hereunder as the Remarketing Agent by giving notice prior to
3:00 p.m., New York City time on the [eleventh] Business Day immediately prior
to the Remarketing Date. Upon receiving notice from the Remarketing Agent that
it wishes to resign hereunder, the Company shall use all reasonable best efforts
to appoint such a successor and enter into a with it as
soon as reasonably practicable.
(c) The Company shall give the Purchase Contract Agent, the Collateral
Agent, the Custodial Agent and the Trustee prompt written notice of any
replacement of the Remarketing Agent pursuant to this section.
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(d) The Remarketing Agent shall give the Purchase Contract Agent, the
Collateral Agent, the Custodial Agent and the Trustee prompt written notice of
its resignation pursuant to this section.
(e) Notwithstanding the above, no such resignation nor any such removal
shall become effective until the Company shall have appointed (with notice to
the Purchase Contract Agent, the Custodial Agent, the Collateral Agent and the
Trustee) at least one nationally recognized broker-dealer as successor
Remarketing Agent and such successor Remarketing Agent shall have entered into a
with the Company, in which it shall have agreed to conduct
the remarketing in accordance with this Agreement in all material respects.
Section 7. DEALING IN THE SECURITIES.
The Remarketing Agent, when acting hereunder or when acting in its
individual or any other capacity, may, to the extent permitted by law, buy,
sell, hold or deal in any of the Notes, Normal Units, Stripped Units or any
other securities of the Company; provided, however, that in buying, selling,
holding, or dealing in any of the Notes, Normal Units, Stripped Units or any
other securities of the Company, the Remarketing Agent may not violate any of
its duties under this Agreement. With respect to any Notes, Normal Units,
Stripped Units or any other securities of the Company owned by it, the
Remarketing Agent may exercise any vote or join in any action with like effect
as if it did not act in any capacity hereunder. The Remarketing Agent, in its
individual capacity, either as principal or agent, may also engage in or have an
interest in any financial or other transaction with the Company as freely as if
it did not act in any capacity hereunder.
The Company or its affiliates may, to the extent permitted by law,
purchase any Notes that are remarketed by the Remarketing Agent.
Section 8. CONDITIONS TO THE REMARKETING AGENT'S OBLIGATIONS.
The obligations of the Remarketing Agent hereunder shall be subject to
the following conditions:
(a) The Prospectus, if any, shall have been timely filed with the
Commission; no stop order suspending the effectiveness of the Registration
Statement, if any, or any part thereof shall have been issued and no proceeding
for that purpose shall have been initiated or threatened by the Commission.
(b) (1) Trading generally shall not have been suspended or materially
limited on the New York Stock Exchange, (2) trading of any securities of the
Company shall not have been materially suspended or limited on the New York
Stock Exchange, (3) a general moratorium on commercial banking activities in New
York, the Cayman Islands or Bermuda shall not have been declared by the relevant
authorities and there shall not have occurred a material disruption in
commercial banking or securities settlement or clearance services in the United
States or other relevant jurisdiction, or (4) there shall not
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have occurred a material adverse change in the financial markets, any outbreak
or escalation of hostilities involving the United States, the Cayman Islands or
Bermuda or the declaration by the United States, the Cayman Islands or Bermuda
of a national emergency or war or other calamity or crisis, if the effect of any
such event specified in this clause (4) in the judgment of the Remarketing Agent
makes it impracticable or inadvisable to proceed with the Remarketing or the
delivery of the Remarketed Notes on the terms and in the manner contemplated in
the Transaction Documents.
(c) The representations and warranties of the Company contained herein
shall be true and correct in all material respects on and as of the Remarketing
Date, and the Company, the Purchase Contract Agent and the Collateral Agent
shall have performed in all material respects all covenants and agreements
contained herein or in the Purchase Contract Agreement or Pledge Agreement to be
performed on their part at or prior to the Remarketing Date.
(d) The Company shall have furnished to the Remarketing Agent a
certificate, dated the Remarketing Date, of the Chief Executive Officer and the
Treasurer satisfactory to the Remarketing Agent stating that: (1) no order
suspending the effectiveness of the Registration Statement, if any, or
prohibiting the sale of the Remarketed Notes is in effect, and no proceedings
for such purpose are pending before or, to the knowledge of such officers,
threatened by the Commission and (2) the representations and warranties of the
Company in Section 3 of this Agreement are true and correct on and as of the
Remarketing Date and the Company has performed in all material respects all
covenants and agreements contained herein to be performed on its part at or
prior to such Remarketing Date.
(e) On the Remarketing Date, the Remarketing Agent shall have received
a letter addressed to the Remarketing Agent and dated such date, in form and
substance satisfactory to the Remarketing Agent, of PricewaterhouseCoopers LLP,
the independent accountants of the Company, containing statements and
information of the type ordinarily included in accountants' "comfort letters"
with respect to certain financial information contained in the Remarketing
Materials, if any.
(f) Each of (1) the General Counsel to the Company, (2) ▇▇▇▇▇▇ ▇▇▇▇▇▇ &
▇▇▇▇▇▇▇ LLP, counsel to the Company, (3) Hunter & Hunter, Cayman Islands counsel
to the Company and (4) White & Case, counsel to the Purchase Contract Agent and
Collateral Agent, shall have furnished to the Remarketing Agent its opinion,
addressed to the Remarketing Agent and dated the Remarketing Date, in form and
substance reasonably satisfactory to the Remarketing Agent addressing such
matters as are set forth in such counsel's opinion furnished pursuant to
Sections 7(c), 7(d), 7(e) and 7(f) of the Underwriting Agreement except that
such opinions (i) shall appropriately address the and, as
to the enforceability of the securities, such opinions shall be limited to the
Remarketed Notes and (ii) may be adapted as necessary to relate to the
Remarketing Materials, if any, or to any changed circumstances or events
occurring subsequent to the date of this Agreement, such adaptations being
reasonably acceptable to counsel to the Remarketing Agent.
12
(g) [________], counsel for the Remarketing Agent, shall have furnished
to the Remarketing Agent its opinion, addressed to the Remarketing Agent and
dated the applicable Remarketing Date, in form and substance satisfactory to the
Remarketing Agent.
(h) There shall not have been, since the respective dates as of which
information is given in the Prospectus, any material adverse change in the
condition (financial or otherwise), business, properties or results of
operations of the Company and its subsidiaries taken as a whole.
Section 9. TERMINATION OF .
This Agreement shall automatically terminate (i) as to the Remarketing
Agent on the effective date of the resignation or removal of the Remarketing
Agent pursuant to Section 6 and (ii) on the earlier of (x) any Special Event
Redemption Date and (y) the Stock Purchase Date. If this Agreement is terminated
pursuant to any of the other provisions hereof, except as otherwise provided
herein, the Company shall not be under any liability to the Remarketing Agent
and the Remarketing Agent shall not be under any liability to the Company,
except that if this Agreement is terminated by the Remarketing Agent because of
any failure or refusal on the part of the Company to comply with the terms or to
fulfill any of the conditions of this Agreement, the Company will reimburse the
Remarketing Agent for all of its out-of-pocket expenses (including the
reasonable fees and disbursements of its counsel) reasonably incurred by it.
Section 10, Section 11, Section 12 and Section 14 hereof shall survive the
termination of this Agreement or the resignation or removal of the Remarketing
Agent.
Section 10. REMARKETING AGENT'S PERFORMANCE; DUTY OF CARE.
The duties and obligations of the Remarketing Agent shall be determined
solely by the express provisions of this Agreement and the Transaction
Documents. No implied covenants or obligations of or against the Remarketing
Agent shall be read into this Agreement or any of the Transactions Documents. In
the absence of willful misconduct, bad faith or gross negligence on the part of
the Remarketing Agent, the Remarketing Agent may conclusively rely upon any
document furnished to it which purports to conform to the requirements hereunder
as to the truth of the statements expressed therein. The Remarketing Agent shall
be protected in acting upon any document or communication reasonably believed by
it to be signed, presented or made by the proper party or parties. The
Remarketing Agent shall not have any obligation to determine whether there is
any limitation under applicable law on the Reset Rate on the Remarketed Notes
or, if there is any such limitation, the maximum permissible Reset Rate on the
Remarketed Notes, and it shall rely solely upon timely written notice from the
Company pursuant to Section 2(a) hereof as to whether or not there is any such
limitation and, if so, the maximum permissible Reset Rate. The Remarketing Agent
shall not incur any liability under this Agreement to any beneficial owner or
holder of Remarketed Notes, or other securities, either in its individual
capacity or as Remarketing Agent, as the case may be, for any action or failure
to act in connection with the remarketing of the Remarketed
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Notes or otherwise in connection with the transactions contemplated by this
Agreement, except to the extent that such liability has, by final judicial
determination, resulted from the willful misconduct, bad faith or gross
negligence of the Remarketing Agent or from its failure to fulfill its express
obligations hereunder. The provisions of this Section 10 shall survive any
termination of this Agreement and shall also continue to apply to every
Remarketing Agent notwithstanding its resignation or removal. The Remarketing
Agent will act as the agent of the Holders.
Section 11. INDEMNIFICATION.
(a) The Company will indemnify and hold harmless the Remarketing Agent,
against any losses, claims, damages or liabilities to which the Remarketing
Agent may become subject, under the Securities Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon an untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement, the Prospectus, or any
amendments or supplement thereto, or any related Preliminary Prospectus or
preliminary prospectus supplement or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, and will
reimburse the Remarketing Agent for any legal expenses of one counsel (in
addition to any local counsel) engaged reasonably incurred by the Remarketing
Agent in connection with investigating or defending any such action or claim as
such expenses are incurred; provided, however, that the Company shall not be
liable in any such case to the extent that any such loss, claim, damage or
liability arises out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission from any of such documents in reliance
upon and in conformity with written information furnished to the Company by the
Remarketing Agent specifically for use therein.
(b) The Remarketing Agent will indemnify and hold harmless the Company,
its directors and officers and each person, if any, who controls the Company
within the meaning of Section 15 of the Securities Act, against any losses,
claims, damages or liabilities to which the Company may become subject, under
the Securities Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in the
Registration Statement, the Prospectus or any amendment or supplement thereto,
or any related Preliminary Prospectus or Preliminary Prospectus supplement, or
any other Remarketing Materials, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, in each case
to the extent, but only to the extent, that such untrue statement or alleged
untrue statement or omission or alleged omission was made in reliance upon and
in conformity with written information furnished to the Company by the
Remarketing Agent specifically for use therein, and will reimburse any legal or
other expenses reasonably incurred by the Company in connection with
investigating or defending any such loss, claim, damage, liability or action as
such expenses are incurred; provided that in no case will the Remarketing Agent
be liable or
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responsible for any amount in excess of the fee paid to the Remarketing Agent
pursuant to Section 4.
(c) Promptly after receipt by an indemnified party under this section
of notice of the commencement of any action, such indemnified party shall, if a
claim in respect thereof is to be made against the indemnifying party under
subsection (a) or (b) above, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party shall
not relieve it from any liability which it may have to any indemnified party
otherwise than under subsection (a) or (b) above. In the case of parties
indemnified pursuant to subsection (a) above, counsel to the indemnified parties
shall be selected by the Remarketing Agent. In case any such action shall be
brought against the indemnified party and it shall notify the indemnifying party
of the commencement thereof, the indemnifying party shall be entitled to
participate therein and, to the extent that it shall wish, to assume the defense
thereof, with counsel satisfactory to such indemnified party (who shall not,
except with the consent of the indemnified party, be counsel to the indemnifying
party), and, after notice from the indemnifying party to such indemnified party
of its election so to assume the defense thereof, the indemnifying party shall
not be liable to such indemnified party under such subsection for any legal
expenses of other counsel or any other expenses, in each case subsequently
incurred by such indemnified party, in connection with the defense thereof other
than reasonable costs of investigation (as set forth below). Notwithstanding the
indemnifying party's election to appoint counsel to represent the indemnified
party in an action, the indemnified party shall have the right to employ
separate counsel (including local counsel), and the indemnifying party shall
bear the reasonable fees, costs and expenses of such separate counsel if (i) the
use of counsel chosen by the indemnifying party to represent the indemnified
party would present such counsel with a conflict of interest; (ii) the actual or
potential defendants in, or targets of, any such action include both the
indemnified party and the indemnifying party and the indemnified party shall
have reasonably concluded that there may be legal defenses available to it
and/or the indemnified party which are different from or additional to those
available to the indemnifying party; (iii) the indemnifying party shall not have
employed counsel satisfactory to the indemnified party to represent the
indemnified party within a reasonable time after notice of the institution of
such action or (iv) the indemnifying party shall authorize the indemnified party
to employ separate counsel at the expense of the indemnifying party. In no event
shall the indemnifying parties be liable for fees and expenses of more than one
counsel (in addition to any local counsel) separate from their own counsel for
all indemnified parties in connection with any one action or separate but
similar or related actions in the same jurisdiction arising out of the same
general allegations or circumstances. No indemnifying party shall, without the
prior written consent of the indemnified parties, settle or compromise or
consent to the entry of any judgment with respect to any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever in respect of which indemnification or
contribution could be sought under this Section 11 (whether or not the
indemnified parties are actual or potential parties thereto), unless such
settlement, compromise or consent (i) includes an unconditional release of each
15
indemnified party from all liability arising out of such litigation,
investigation, proceeding or claim and (ii) does not include a statement as to
or an admission of fault, culpability or a failure to act by or on behalf of any
indemnified party.
Section 12. CONTRIBUTION.
(a) If the indemnification provided for in Section 11 is unavailable to
or insufficient to hold harmless an indemnified party under Sections 11(a) or
11(b), then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of the losses, claims, damages or
liabilities (or actions in respect thereof) referred to in subsection (a) or (b)
above (i) in such proportion as is appropriate to reflect the relative benefits
received by the Company on the one hand and the Remarketing Agent on the other
from the offering of the Remarketed Notes or (ii) if the allocation provided by
clause (i) is not permitted by applicable law, in such proportions as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Company on the one hand and the
Remarketing Agent on the other in connection with the statements of omissions
which resulted in such losses, claims, damages or liabilities as well as any
relevant equitable considerations. The relative benefits received by the Company
on one hand and the Remarketing Agent on the other hand in connection with the
Remarketing shall be deemed to be in the same proportions as the total net
proceeds of the Remarketed Notes less the fee paid to the Remarketing Agent on
the one hand and the fee paid to the Remarketing Agent on the other hand bear to
the total net proceeds of the Remarketed Notes. The relative fault shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company on the one hand
or the Remarketing Agent on the other hand and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Company and the Remarketing Agent agree that it would
not be just and equitable if contribution pursuant to this subsection (a) were
determined by pro rata allocation or by any other method of allocation which
does not take account of the equitable considerations referred to above in this
subsection (a). The amount paid or payable by an indemnified party as a result
of the losses, claims, damages or liabilities (or actions in respect thereof)
referred to above in this subsection (a) shall be deemed to include any legal or
other expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this subsection (a), the Remarketing Agent shall not be required
to contribute any amount in excess of the amount by which the fees received by
it under Section 4 exceeds the amount of any damages which the Remarketing Agent
has otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.
(b) The obligations of the Company under Section 11 and this Section 12
shall be in addition to any liability which the Company may otherwise have and
shall extend,
16
upon the same terms and conditions, to each officer and director of the
Remarketing Agent and to each person, if any, who controls the Remarketing Agent
within the meaning of the Securities Act; and the obligations of the Remarketing
Agent under Section 11 and this Section 12 shall be in addition to any liability
which the Remarketing Agent may otherwise have and shall extend, upon the same
terms and conditions, to each director of the Company, to each officer of the
Company who signed the Registration Statement and to each person, if any, who
controls the Company within the meaning of the Securities Act.
(c) The indemnity and contribution provisions contained in Section 11
and this Section 12 and the representations, warranties and other statements of
the Company contained in this Agreement shall remain in full force and effect,
regardless of any investigation (or any statement as to the results thereof)
made by or on behalf of the Remarketing Agent or any person controlling the
Remarketing Agent, or the Company, its officers or director or any controlling
person of the Company, and the completion of the Remarketing.
Section 13. PERSONS ENTITLED TO BENEFIT OF AGREEMENT.
This Agreement shall inure to the benefit of and be binding upon each
party hereto and its respective successors. This Agreement and the terms and
provisions hereof are for the sole benefit of only those persons, except that
(x) the representations, warranties, indemnities and agreements of the Company
contained in this Agreement shall also be deemed to be for the benefit of the
Remarketing Agent and the person or persons, if any, who control the Remarketing
Agent within the meaning of Section 15 of the Securities Act and (y) the
indemnity agreement of the Remarketing Agent contained in Section 11(b) of this
Agreement shall be deemed to be for the benefit of the Company's directors and
officers who sign the Registration Statement, if any, and any person controlling
the Company within the meaning of Section 15 of the Securities Act. Nothing
contained in this Agreement is intended or shall be construed to give any
person, other than the persons referred to herein, any legal or equitable right,
remedy or claim under or in respect of this Agreement or any provision contained
herein.
Section 14. GOVERNING LAW; SUBMISSION TO JURISDICTION; JUDGMENT CURRENCY.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK.
The Company irrevocably (i) agrees that any legal suit, action or
proceeding against the Company brought by the Remarketing Agent or by any person
who controls the Remarketing Agent arising out of or based upon this Agreement
or the transactions contemplated hereby or thereby may be instituted in the
federal district court for the Southern District of New York and the New York
County Court, (ii) waives, to the fullest extent it may effectively do so, any
objection which it may now or hereafter have to the laying of venue of any such
proceeding and (iii) submits to the exclusive jurisdiction of such courts in any
such suit, action or proceeding. The Company has appointed CT
17
Corporation System, New York, New York, as its authorized agent (the "Authorized
Agent") upon whom process may be served in any such action arising out of or
based on this Agreement or the transactions contemplated hereby or thereby which
may be instituted in the federal district court for the Southern District of New
York and the New York County Court by the Remarketing Agent or by any person who
controls the Remarketing Agent, expressly consents to the jurisdiction of any
such court in respect of any such action, and waives any other requirements of
or objections to personal jurisdiction with respect thereto. Such appointment
shall be irrevocable. The Company represents and warrants that the Authorized
Agent has agreed to act as such agent for service of process and agrees to take
any and all action, including the filing of any and all documents and
instruments, that may be necessary to continue such appointment in full force
and effect as aforesaid. Service of process upon the Authorized Agent and
written notice of such service to the Company shall be deemed, in every respect,
effective service of process upon the Company.
In respect of any judgment or order given or made for any amount due
hereunder that is expressed and paid in a currency (the "judgment currency")
other than United States dollars, the Company will indemnify the Remarketing
Agent against any loss incurred by the Remarketing Agent as a result of any
variation between (i) the rate of exchange at which the United States dollar
amount is converted into the judgment currency for the purpose of such judgment
or order and (ii) the rate of exchange at which the Remarketing Agent is able to
purchase United States dollars with the amount of judgment currency actually
received by the Remarketing Agent. The foregoing indemnity shall constitute a
separate and independent obligation of the Company and shall continue in full
force and effect notwithstanding any such judgment or order aforesaid. The term
"rate of exchange" shall include any premiums and costs of exchange payable in
connection with the purchase of or conversion into United States dollars.
Section 15. SURVIVAL.
The respective indemnities, representations, warranties and agreements
of the Company and the Remarketing Agent contained in this Agreement or made by
or on behalf of them, respectively, pursuant to this Agreement, shall survive
any Remarketing and shall remain in full force and effect, regardless of any
investigation made by or on behalf of any of them or any person controlling any
of them.
Section 16. SUCCESSORS AND ASSIGNS.
The rights and obligations of the Company hereunder may not be assigned
or delegated to any other Person without the prior written consent of the
Remarketing Agent. The rights and obligations of the Remarketing Agent hereunder
may not be assigned or delegated to any other Person (other than an affiliate of
the Remarketing Agent) without the prior written consent of the Company.
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Section 17. HEADINGS.
Section headings have been inserted in this Agreement as a matter of
convenience of reference only, and such section headings are not a part of this
Agreement and will not be used in the interpretation of any provision of this
Agreement.
Section 18. SEVERABILITY.
If any provision of this Agreement is invalid, inoperative or
unenforceable as applied in any particular case in any or all jurisdictions
because it conflicts with any provisions of any constitution, statute, rule or
public policy or for any other reason, then, to the extent permitted by law,
such circumstances shall not have the effect of rendering the provision in
question invalid, inoperative or unenforceable in any other case, circumstances
or jurisdiction, or of rendering any other provision or provisions of this
Agreement, as the case may be, invalid, inoperative or unenforceable to any
extent whatsoever.
Section 19. COUNTERPARTS.
This Agreement may be executed in counterparts, each of which shall be
regarded as an original and all of which shall constitute one and the same
document.
Section 20. AMENDMENTS.
This Agreement may be amended only by an instrument in writing signed
by the Company and the Remarketing Agent.
Section 21. NOTICES.
Unless otherwise specified, any notices, requests, consents or other
communications given or made hereunder shall be made in writing or transmitted
by any standard form of telecommunication, including telephone or telecopy, and
confirmed in writing. All written notices and confirmations of notices by
telecommunication shall be deemed to have been validly given or made when
delivered or mailed, registered or certified mail, return receipt requested and
postage prepaid. All such notices, requests, consents or other communications
shall be addressed as follows: if to the Company, to XL Capital Ltd, ▇▇ ▇▇▇▇▇,
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, fax number: (▇▇▇) ▇▇▇-▇▇▇▇,
Attention: General Counsel; if to the Remarketing Agent, to [________],
[________], [________], fax number [________], Attention: General Counsel; if to
the Collateral Agent, to U.S. Bank Trust National Association, [________],
[________], fax number [________], Attention: [________]; and if to the Purchase
Contract Agent, to U.S. Bank National Association, [________], [________], fax
number [________], Attention: [________], or to such other address as any of the
above shall specify to the others in writing.
19
IN WITNESS WHEREOF, each of the Company, the Purchase Contract Agent
and the Remarketing Agent has caused this Agreement to be executed in its name
and on its behalf by one of its duly authorized signatories as of the date first
above written.
XL CAPITAL LTD
By: ___________________________
Name:
Title:
[________], as Remarketing Agent
By: _______________________________
Name:
Title:
CONFIRMED AND ACCEPTED:
U.S. BANK NATIONAL ASSOCIATION
not individually but solely as Purchase Contract Agent
and as attorney-in-fact for the Holders of the Purchase Contracts
By:__________________________
Name:
Title:
20
